If any of you ever does something like this and you make a 'bad' move, revert. Simple. Make a step back and think things over for a long time before changing direction again, assuming that you are not about to go out of business buy yourself some time. It takes a long time to build up a reputation you can lose it in a heartbeat.
Chargify has made a huge step in the right direction by dropping their price to $40 / month but if they had started out with announcing a $0 to $40 increase that would have been just as a big a problem reputation wise. A contract you made should never be broken like this, especially not retro-actively with the people that signed up under the original terms. New terms apply to new customers, especially such dramatic changes.
Of course if you have customers that you can't make any kind of payback on then you will have to do something about them (assuming they're pulling you under). But to change direction 180 degrees from your previous 'pitch' overnight is not good and this new revised plan is still not going to undo the damage.
My plan of action would be:
- stop the influx of new customers at the 'free' plan by
changing the tos: free for 6 months, then pay
- measure the effect of that and if it is good reduce the
'free' period
- if it is free, no support other than the public
documentation + a forum
- if you want support you will have to sign up for the
paid plan
Disclaimer: I've been operating a freemium website for a long time that went through the free to premium step during the .com crash, we solved it by selling our customers new features that were not in the site before and we made sure that the 'free' users pay us back with content. There always is a way out if you look for it hard enough.